Application Portfolio Management (APM) Best Practices

Overview

Every enterprise application portfolio contains significant wasted spend that is invisible without the portfolio visibility that APM provides. Software licenses purchased but never deployed to users. SaaS subscriptions whose user bases have shrunk but whose license counts have not been adjusted at renewal. Infrastructure provisioned at peak capacity levels for applications that run at a fraction of peak capacity for ninety percent of the operating period. Redundant applications purchased by different organizational units that perform identical functions at double the cost of a single governed solution. This wasted spend is not the result of deliberate overspending - it is the predictable and inevitable consequence of managing a complex application portfolio without the visibility to see what is and is not delivering value relative to its cost.

Best Practice

Conduct a systematic wasted spend analysis as an early and recurring APM activity, prioritized alongside the initial portfolio discovery. Identify unused or underused license allocations by comparing licensed quantities to actual active users and actual consumption. Identify SaaS subscriptions with low utilization rates by comparing subscription capacity to actual usage data and comparing the subscription’s functionality to that of other tools in the portfolio. Identify over-provisioned infrastructure by comparing allocated compute, storage, and network resources to actual consumption patterns over representative operating periods. Identify functionally redundant applications by comparing the capabilities of applications serving similar user populations or business capabilities. Develop a waste elimination plan that sequences remediation actions in order of financial magnitude and implementation simplicity.

Benefit(s)

Systematic waste elimination is consistently the highest near-term financial return activity in APM and one of the most powerful validators of the APM business case. Organizations conducting their first portfolio-wide waste analysis routinely identify ten to twenty-five percent of their application portfolio spend as eliminable without any reduction in business capability. The financial returns from waste elimination fund ongoing APM investment and build the organizational credibility that sustains the program. The waste analysis also serves as a powerful business case validation - the savings identified in the first analysis provide concrete evidence that APM delivers measurable financial value, making subsequent investments in APM maturity advancement significantly easier to justify.